Condominiums (“condos”) are a major entry point into homeownership for first-time buyers, and an affordable housing option in many high cost geographical areas. Many people achieve the dream of home ownership for the first time through the purchase of a condo. A lender's ability to broaden its reach into the condo market can have a significant impact on its ability to meet underserved borrower's needs for affordable housing.
Condo loans, like loans for other housing, are often sold by lenders into the secondary mortgage market. This allows capital from the financial markets to flow into the housing market, and improves the overall flow of capital to mortgage sectors, thereby reducing mortgage costs for consumers and enabling more consumers to purchase condos or other housing. Typically, lenders and secondary mortgage market investors work together in advance of closing to ensure that a given condo loan will be suitable for sale to the secondary mortgage market investor (i.e., assuming the lender is planning on selling the condo loan in the secondary mortgage market). Additionally, lenders and mortgage market aggregators work together to determine whether a condo loan should be made. For the case of either type of investor, with a condo loan, there may be both a review of the corresponding condo project, and a review of the condo loan. For example, the investor may review characteristics of a condo project in order ensure that the condo project meets predetermined criteria and make a list of accepted condo projects available to lenders. When a consumer comes to a lender for a loan, the lender may review the list of accepted condo projects to confirm that it is on the accepted list. This provides the lender with a level of assurance that the investor will not subsequently refuse to purchase the condo loan on the basis that the condo project does not meet its criteria. Assuming the condo project is on the accepted list, the lender may then evaluate the credit characteristics of the borrower (e.g., using an automated underwriting engine made available by the investor) to determine whether a loan should be made to the borrower. If the condo project is not on the list, the lender may request the investor to conduct a review of the condo project to determine whether it meets the predetermined criteria. Once a condo project has been reviewed and accepted, additional loans may be made for additional condos in the condo project without necessarily having to duplicate the condo project review each time. Even if the lender is planning on retaining the condo loan in its own portfolio (i.e., and not selling it to another secondary mortgage market investor), the lender may still wish to review the condo project to ensure the condo project meets with the lender's own criteria.
The review process undertaken by investors to review condo project characteristics is time-consuming, sometimes delaying the time to place consumers in a home. As a result, there is a need for a system and method that facilitates acceptance of condo projects. There is also a need for a system and method that would allow investors to delegate to lenders the responsibility for reviewing condo projects. It will be appreciated that, while certain functions and advantages are described, the teachings herein may be used to implement systems which achieve other functions and advantages, without necessarily achieving any of those described herein.